Mitsubishi Heavy Steps Closer to Investment in France's Arevaby
Couches proposal in terms of wider Franco-Japan collaboration
Two nuclear companies have relationship going back to 2006
Mitsubishi Heavy Industries Ltd. moved closer to investing in Areva SA’s reactor unit after it said it has begun examining a “concrete proposal” to take a minority stake, a step that would deepen ties between Japan and France in the generation of nuclear energy.
Japan’s sole producer of pressurized water reactors said Friday that in coming weeks it will consider the conditions for making an offer for Areva NP, including “ownership ratios,” and will also “work up a proposal of Japan-France collaborative measures” around the safety and reliability of nuclear power plants.
The Tokyo-based company’s statement comes a month after French Prime Minister Manuel Valls sought Japanese investment in the Areva unit as part of wider collaboration between the two governments over nuclear energy. Any deal would help state-owned Areva shore up its finances after losses caused in part by the retreat from atomic energy in countries including Japan and Germany.
Mitsubishi’s investment would deepen a partnership with Areva that began in 2006. The two companies signed a $22 billion agreement in May 2013 to build a nuclear power plant in Turkey, the first major order for a Japanese firm since Fukushima. It would also signal the importance to Mitsubishi of seeking overseas contracts to replace domestic sales lost by the shuttering of Japan’s atomic reactors in the wake of the 2011 disaster.
Mitsubishi would join Electricite de France SA in owning Areva NP. EDF, the world’s biggest operator of nuclear plants, said in July it plans to take a majority stake in the reactor unit as part of a rescue plan for the unprofitable Areva. The two state-controlled companies also agreed to set up a venture to manage new projects, including exports, that would be led by EDF.
Mitsubishi first said it was interested in investing in Areva NP June. This week, Areva SA said China National Nuclear Corp. may buy a minority stake in the parent company as part of wider ranging nuclear cooperation.
Mitsubishi is a maker of ships, planes and rockets. Its recent success has been in power systems that now account for 40 percent of revenues. Its thermal business is conducted in partnership with another Japanese conglomerate, Hitachi Ltd.
Japan restarted the first of its 43 operable atomic reactors in August despite public opposition. The government anticipates that nuclear will account for as much as 22 percent of electricity generation by 2030.
Mitsubishi built about half of the nuclear reactors in Japan. For its project, the Turkish government chose a 1,100-megawatt unit, called Atmea, which was jointly designed by Mitsubishi and Areva.